Outsourcing is one of the most underrated tools when it comes to scaling your business. Outsourcing essential tasks allow you to expand your organization without having to take on the burden of hiring additional individuals, investing in capital equipment, or leasing new commercial spaces. Essentially, outsourcing drastically cuts down the cost of operation while giving you access to some of the most specialized talent in the field. Over the past decades, companies have also started outsourcing specialized tasks in industries such as IT, manufacturing, finance, healthcare, retail, and so many more.
It often happens that you can’t scale your organization due to certain limitations. These limitations may take several forms — limited human resources, real estate space, and capital, etc. However, you can hire an external organization that specifically focuses on the particular task at hand, which means they’ll have access to the resources you need. In this case, you can instantly scale your business operations without having to overcome these limitations in-house.
Let’s say you need to expand your IT solutions, but your company doesn’t specifically deal with IT-related tasks, resulting in the need for an IT expert. You’ll also go through an inevitable trial-and-error phase where you try to find what works best for your organization. All of this can lead to redundancies that can be pretty costly in the long run. By outsourcing these tasks to specialists in the field, you don’t just cut down your direct development costs but also eliminate the trial-and-error phase. This will save resources and allow employees to focus on tasks that they can already handle well.
Outsourcing companies are made up of individuals who are experts in specific tasks. Furthermore, these companies usually comprise experts from across the globe. Your team may lack that level of expertise so you can leverage outsourcing to gain access to some of the world’s most expert and specialized talents. Let’s say you have a one-time app development project for which you need IT professionals. In this case, it’s simply not cost-effective or time-effective to scout for new individuals, vet them, and then hire them. However, outsourcing companies are made up of some of the most excellent hand-picked experts. You can circumvent all the costs and time associated with recruitment and vetting and get straight to the heart of the task.
The primary purpose of outsourcing is to increase your bottom line and efficiency. To calculate whether outsourcing will lower your real cost, you’ll need to take all the direct and indirect costs of in-house work into consideration.
Direct cost of in-house work simply refers to the finances you’ll spend on capital, human resources, and commercial space in order to fulfill a task. Indirect cost of in-house work refers to the cost in terms of inefficiencies, redundancies, loss of staff time, increased overhead to manage certain tasks, the time spent on recruitment, etc.
Direct cost of outsourcing refers to the payment you’ll have to make to the outsourced organization. The indirect cost of outsourcing refers to the cost of finding and implement the organization’s solutions and integrating it into your company.
When you compare the total cost of both in-house and outsourced work, you’ll get a clear picture of which of these routes would be most beneficial for you. Generally speaking, outsourcing almost always proves to be more fruitful when it comes to tasks that your organization doesn’t directly specialize in — for example, if you’re a fashion retail company looking to develop a web presence or applications.
You should be wary and careful of outsourcing tasks that form a core foundation of your business. For example, if your organization provides digital security solutions, you should be cautious about hiring an external company to handle your digital security. This can allow disruption in the industry which can challenge your business, proving to be very costly down the line.
An infamous example of this particular lesson is Dell. The company outsourced the manufacturing of its core computer functions to Asia to save time. However, in doing so, they equipped them with valuable manufacturing know-how and inadvertently opened up a new line of competition.
Often, you may not know which organization, individuals, or teams to approach to outsource essential company tasks. Trying to find a reliable company — and then thoroughly vetting them — can be a tedious and expensive process all on its own. That’s why you should hire the services of outsourcing experts to handle all of your staffing needs.
However, even when you’re looking for outsourcing experts, you should keep a few key points in mind:
• Find an outsourcing company that also handles training and development so that you don’t have to invest your resources in training the outsourced company.
• Make sure the outsourcing experts run thorough vetting and background checks. This safeguards you against ill-equipped, understaffed, or fraudulent parties.
• Be wary of outsourcing experts that seem too good to be true — those that offer all of the services mentioned above at a remarkably low cost. Lower cost often correlates with lower quality services, which can hurt your company in the long run.
Outsourcing companies can give you access to some of the world’s finest industry talent — whether you want to hire contract staff, project-based services, or outsourced services. In addition to giving you access to the leading talents in the industry, the company can also save precious time and resources that you would otherwise spend on vetting or training your outsourced partners.
You may think that your company can handle everything internally. You may be wary of outsourcing tasks to external companies because you’re afraid of redundancies, inefficiencies, or simply because you want to be self-sufficient. However, the benefits of outsourcing are numerous and impossible to ignore. It can give you access to some the world’s leading talent, reduce your company costs drastically, help you focus on tasks that your company is meant for, and also help scale operations and develop solutions instantly.
When you’re looking to outsource company tasks, be sure to hire the services of outsourcing experts because they can help you find top talent while also handling all the training and vetting so you can focus on internal tasks without disruption.